US: Consumer Confidence drops but remains high – Wells Fargo

The US Consumer Confidence Index dropped 2.2 points in October. According to analysts from Wells Fargo, the reading is still-elevated and suggests strong consumer spending in the final months of the year.  

Key Quotes:  

“Dropping slightly from its 18-year high, consumer confidence came in at 135.7 in November. The still-elevated level kept the three-month average at a cycle high, which suggests the trend in confidence remains buoyant. The modest drop was contained in the expectations component of the index, while consumers’ assessment of current conditions rose. Current optimism continues to be a reflection of the white-hot labor market.”

“Consumers’ expectations regarding rate-sensitive purchases (autos, homes & appliances) six-months ahead have remained elevated more recently. But, a rising rate environment and weaker hard data, particularly in the housing sector, will likely weigh on these purchases in the medium-to-long term.”